It's weird that people think AI breaks the concept of work sample testing. Work sample testing isn't "about" programming, and predates the profession of programming. You can (and some companies do) work-sample test sales account managers, customer support, accountants, whatever.

AI changes the underlying job you're testing for. So, obviously, the tests you might have been using pre-AI won't work anymore; they're testing something that isn't really the job anymore. Update your tests so they're about the real work again, that's all. For coding, that probably means assuming (or requiring) candidates use AI to do your assessment.

What AI really does mess with is conversational/interactive interviewing. We do all our interactive scripted interview on Slack, but I can imagine us having to end that practice and return to face-to-face.